By Lola Alapo
Supply chain, simply put, is the flow of products, associated services, and finances from suppliers to customers.
The process, however, is anything but simple. It involves a complex web of people and facilities working to ensure products are made at the lowest possible cost and arrive to the customer at exactly the right time, place, and price.
Any hiccups along the way could mean an alienated supplier, an unsatisfied customer, or a huge financial loss to a company.
UT’s logistics and supply chain management faculty, housed in the College of Business Administration, have built an international reputation of excellence by helping companies improve their processes. They are continually researching best practices to advance the industry, preparing students to be better managers, and reaching out to partners around the globe to help address worldwide supply chain issues.
“It used to only be about cost,” says Ted Stank, the Bruce Chair of Excellence in Business and professor of logistics and supply chain management. “Now, it becomes a strategic element. We’ve seen firms compete not just about the product, but how fast and well they can get it into your hands.”
UT supply chain faculty, currently ranked first worldwide in research productivity, see themselves as social scientists whose laboratories are the businesses with whom they work.
“Business scholarship must be closely linked to business application,” Stank says. “Academic business researchers cannot retreat into the ivory tower; the research questions they address are driven by industry need, which means that the researchers must engage regularly with industry leaders. Our faculty have studied the processes of some of the nation’s leading companies, such as Dell, Walmart, Pilot Corporation, Bush Brothers & Company, Brunswick Boats, and Alcoa Inc.
“We engage managers and try to understand problems they are confronting, techniques they’re using to overcome those problems, and places where they’re not succeeding,” Stank says. “This typically leads to increased sales and better inventory planning.”
To facilitate the interaction between academia and industry, the college recently established the Global Supply Chain Institute as an umbrella for all its supply chain offerings, including its biannual Supply Chain Forum, a meeting for US-based corporate leaders, professors, and students to share ideas and discuss the latest issues. It currently has fifty-two member companies and brings together more than 150 participants.
In response to the “flattening” of the business world, last year the institute began hosting a yearly Global Supply Chain Forum, drawing leaders from international business giants such as Caterpillar, Procter & Gamble, and Honeywell. It has also formed strategic partnerships with institutions in Paris, Singapore, Budapest, and Rio de Janeiro.
UT is home to the top supply chain management scholars and research leaders in the world. In 2012 alone, they have published five books and are ranked first worldwide in research productivity according to the International Journal of Physical Distribution and Logistics Management. Their big ideas are helping to drive business decisions. Here’s a glimpse into some of their recent efforts.
Watching Global Trends
In March 2000, Coca-Cola built a factory in the village of Plachimada in the state of Kerala, India. Within two years of opening, villagers began complaining that the company was taking too much of the shared water supply, creating severe water shortages and contributing to pollution. They filed lawsuits against Coca-Cola, which led to the eventual closure of the factory in 2004.
John Bell, assistant professor of supply chain management, often shares this case study with his students.
“Don’t be that guy at Coke who spent $16 million to open a plant, only to have it shut down,” he says.
Bell and Chad Autry, associate professor of supply chain management, are co-authors of a book that challenges managers to look beyond the short-term view of running a business and making profits. They believe paying attention to changing worldwide trends will be critical to directing a successful business over the next twenty-five years.
“Making money is great, but these days, great isn’t good enough,” Autry says.
Business leaders must balance financial goals with social and environmental goals—namely their businesses’ interaction with the communities they serve and their relationship with the planet.
Their book, Supply Chain Management in a Transforming World, which they are writing with Thomas Goldsby of The Ohio State University, is scheduled for publication in late 2012.
For thirty-two years, Paul Dittmann held various executive positions overseeing the supply chain processes of the Whirlpool Corporation. Seven-and-a-half years ago, he brought that expertise to the College of Business Administration, where he now shares his knowledge as a lecturer and executive director of the Global Supply Chain Institute.
An exploration of how a company’s supply chain processes drive shareholder value led Dittmann to write an article for the Harvard Business Review, titled “Are You the Weakest Link in Your Supply Chain?” The article eventually became the premise of a 2010 book, The New Supply Chain Agenda, which he co-authored with Reuben Slone, senior vice president at Walgreens, and the late Tom Mentzer, UT Chancellor’s Professor. The book outlines five successful supply chain strategies and shows ways to avoid mistakes that can harm a business.
Dittmann’s latest book, Supply Chain Transformation: Building and Executing an Integrated Supply Chain Strategy, sets forth best practices for creating a world-class supply chain. It includes real-world success stories and testimonials from managers at companies like Amazon, Lowe’s, and Colgate.
Returns on Investment
Every day, companies receive products returned from customers for a myriad of reasons. Diane Mollenkopf is interested in returns management, or what happens to those goods when they come back.
“Too many companies look at returns as a loss,” she says. “I focus on the value opportunities. Value can be created by reclaiming parts, refurbishing and remanufacturing products for resale, minimizing waste in landfills, and ensuring that customers are satisfied in the trading relationship.”
Mollenkopf, McCormick Associate Professor of Logistics and director of the supply chain management PhD program, researches reverse supply chain because it dovetails into another interest: sustainability.
Mollenkopf helps companies think about repurposing items or innovating processes in light of the planet’s limited resources. “Recapturing parts and precious metals out of electronic equipment, or refurbishing outdated carpeting provides an input for companies when they manage their reverse supply chains,” she says. “It makes it easy for them to be environmentally responsible.”
In his many years as a US Navy Supply Corps officer, Kenneth Petersen served in various capacities that included purchasing, logistics, and operations management. That professional experience translated well into an academic career working with industry to improve purchasing and supply chain processes in order to drive business performance.
Petersen, the John H. “Red” Dove Professor of Supply Chain Management, is currently working on a book with Stank and Mandyam Srinivasan, titled Global Supply Chain Management: A Regional Approach, that explores which countries have burgeoning economies, good infrastructure, and are places where companies might want to do business.
“We are the evangelists for why the status quo doesn’t work,” Petersen says. “The world is changing and you have to change with it.”